2015 (10) TMI 2485 - AT - Income Tax

Assessment u/s 153A - Held that - Assessments in both these cases passed u/s. 153A r.w.s. 143(3) were not made based on any incriminating material found or seized during the course of search of thereafter. The addtions are purely based on the material already avaiblae on record. Hence all the additions in both the cases are deleted - Decided in favour of assessee

Summary

Issues:
Appeals against assessment orders for AY 2008-09 & 2009-10; Jurisdiction under section 153A; Validity of assessment order; Additions made under section 69C; Precedent of Delhi High Court in CIT vs. Kabul Chawla.

Analysis:
The appeals were filed against assessment orders for AY 2008-09 & 2009-10. The appellant contested the jurisdiction of the Assessing Officer (AO) in framing the assessment order under section 153A/143(3), alleging non-compliance with legal procedures and lack of incriminating material. The appellant challenged the addition of Rs. 2,10,000 on account of foreign travel under section 69C, claiming that the AO disregarded evidence and exceeded jurisdiction. The First Appellate Authority upheld the AO's order, leading to the appeals.

During the hearing, it was noted that no incriminating material was found during the search and seizure operation under section 132. Referring to the precedent set by the Delhi High Court in CIT vs. Kabul Chawla, it was established that assessments for the relevant years had not abated, and the additions were made based on existing records, not on seized material. The Court clarified that assessments under section 153A should be linked to seized material and not arbitrary.

Following the Court's precedent, the appeals were allowed as the assessments were not based on incriminating material from the search. The additions were deemed unjustified as they relied on existing records. Consequently, all additions in both cases were deleted, and the grounds raised by the appellant were upheld. As a result, both appeals filed by the Assessee were allowed, and the orders were pronounced on 19th October 2015.